Product Focus: Mortgages

Category:
Mortgages

Updated:
27/01/2010
First Published:
24/07/2009

MONEYFACTS ARCHIVE

This article was correct at the time of publication. It is now over 6 months
old so the content may be out of date.

Reports have confirmed that total mortgage lending for June increased from May's figures and the number of mortgages approved for house purchase also increased. It is a good sign that lending may have bottomed out, although rates for new borrowing remain a little high. Here is a selection of the better deals.

2 year fixed rate mortgage – NatWest Mortgage Services

Two year fixed rate mortgage products have been the preferred option for many over the past few years. NatWest Mortgage Services offers a deal at 3.69 per cent fixed to 31 August 2011, which reverts to a standard variable rate of 4.00 per cent. The product is available to those who can raise a deposit of at least 25 per cent of the property value, either first time buyers or those moving home. This deal has a reasonable arrangement fee of £799, plus overpayments are permitted on this mortgage.

3 year fixed rate mortgage – First Direct

Interest rates are slightly higher on a 3 year fixed rate deal than on a 2 year, although the better rates can be found on deals where you are able to raise a 40 per cent deposit. First Direct offers a deal at 4.24 per cent fixed for 3 years, with a maximum loan to value of 60 per cent and an arrangement fee of £998. This product is available to all borrower types, has flexible features and an option to offset savings against the balance of the mortgage.

5 year fixed rate mortgage – Chelsea Building Society

The Chelsea Building Society has a 5 year fixed rate deal which tops the Moneyfacts.co.uk best buys at 4.80 per cent until 31 August 2014. This deal is available to a maximum loan to value of 65 per cent and has an arrangement fee of £995. The product comes with an additional incentive of a free valuation.

Variable Tracker Rate Mortgage

With base rate at a record low, there are some good value tracker rate mortgages currently on offer. HSBC has a tracker rate mortgage at 2.95 per cent for term (base rate + 2.45 per cent) with a fee of £799 payable and available to those who can raise a deposit of at least 25 per cent deposit. There is no early redemption charge payable, which allows a cheaper escape from the mortgage if base rate rises steeply.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

On 31 December, phase two of the Help to Buy initiative will be withdrawn from the market. It’s certainly done wonders for the high loan-to-value sector, so we thought we’d take a closer look at the significance of the scheme and the effect it’s had.